Banks and credit unions in Cameroon have always hedged their loans on solid collateral, the most secure of which is property. For most new entrepreneurs, this excludes them from access to financing, while many established business owners hesitate to risk their assets.
When small business owners are not relying on family to grow their businesses, one area they have relied on over the years is a trusted network of people with common interests called a ‘Njangi.’ People from the same tribe, school, or office set a fixed amount they contribute every month which is handed to one person or group of persons to finance their projects.
This is what young fashion designer Doris is relying on to grow her company, D Fashion, as a member of a Njangi that meets monthly. “When it’s my turn to receive, I will buy a new sewing machine and stock more fabrics. I belong to a credit union but I prefer to wait my turn in a Njangi or get a loan from them because they put less pressure on you than the credit union.” Doris also likes the socializing that comes with Njangis where she meets and learns from more experienced people.
A good number of young entrepreneurs have embraced online crowdfunding platforms as financial technology and online lending become increasingly popular. The internet has also made it easier for venture capitalists to identify and fund promising startups everywhere on the continent. GiftedMom, an e-health startup that specializes in maternal and child care, has raised $220,000 from Seedstars, the Mastercard Foundation and pan-African accelerator ALN Ventures. Capital also comes in from Cameroonians in the diaspora who are vital for Cameroon’s growth.
Operating at the grassroots level where financial institutions see little profit, many NGOs give traders and farmers access to loans which they use to buy seeds, fertilizers and equipment to improve yields. The government has put in place programs through the National Employment Fund, Small and Medium-Sized Promotion Agency (APME) and Cameroonian Bank for SMEs.
Export Portal understands how integral funding is for SMEs to get off the ground. We are dedicated to connecting you with the financing opportunities you need to take your company to the next level. Register for free today!